Thinking Points

  • Fisco slowed down its reports to a more relaxing pace last week, following a whopping 10 report week.
  • We have two companies, one in shipping and another in the mobile carrier industry.
  • Let me know if you want to know more about the mobile carrier industry!

The folks at Fisco probably heard us. After publishing a whopping 10 reports in one week, the kind folks at Fisco slowed it down to two reports last week. A nice bit of reading over morning coffee if you ask me!


Iino Lines (TSE: 9119)

Iino Lines is primarily a maritime transport company and secondarily a real estate company. The most notable point about Iino is that it operates the largest fleet of chemical tankers. With that said, it’s been a tough few years for just about every shipping business. Though 87% of Iino revenues came from shipping, the real estate business accounted for 57.3% of operating income:


Source: Annual Report (translation by author)


The company operates in a capex heavy industry. For those specifically looking for companies in the shipping industry, Fisco’s report on Iino is worth a read. Otherwise, I have a difficult time finding the company interesting, both from a quantitative and qualitative perspective.

Read Fisco’s full-report on Iino Lines here.


Conexio Corporation (TSE: 9422)

Conexio is the second largest mobile phone agency in Japan, as Fisco’s report states. But before going into that, let me clarify a bit. In Japan, there are three major phone carriers: NTT Docomo (TSE: 9437), KDDI (TSE: 9433), and Softbank (TSE: 9984). Much like AT&T or Verizon, the carriers have retail stores. Just like their US counterparts, you can walk in and buy a new phone, pay your bill, or yell at customer service for locking you into a contract for two [email protected]#ing years.

Though KDDI and Softbank both directly operate a select few “flagship” stores, nearly all of these stores are operated by a mobile phone agency. NTT Docomo, Japan’s largest mobile carrier, operates exactly ZERO stores. And Conexio has the largest footprint of Docomo stores.

If you’re interested in Japanese mobile carriers in general, you can read the first few sections of this article. The article itself is about Okinawa Cellular (TSE: 9436), a regional subsidiary of KDDI.

Conexio’s key competitors include Hikari Tsushin (TSE: 9435) and T-Gaia (TSE: 3738). Among them, Conexio appears most attractive to me from a business performance and investment perspective. One thing to keep in mind is that Conexio is effectively married to NTT Docomo. Though it also operates KDDI and Softbank stores, 366 of Conexio’s 428 stores are Docomo stores.

And the thing about being married to NTT Docomo is the emergence of low-cost MVNOs. Basically the Cricket Wireless and Virgin Mobiles of Japan. I haven’t looked into the industry recently, but a little over a year ago, most MVNOs used NTT Docomo’s network because it was the cheapest (mostly because the government forced it to be).

MVNOs have gradually increased its presence, accounting for a little over 10% of mobile contracts today. While KDDI and Softbank have both taken a “main vs. sub brand” approach by operating as both MNO and MVNO, NTT Docomo stuck to the main brand only. So far, it seems like this strategy is holding up well, but we’ll have to see how ARPUs and contract count holds up in the years ahead.

Read Fisco’s full report on Conexio here.


Fisco Wrap Up

Perhaps I’m not familiar enough with the shipping industry to find Iino Lines all that interesting. But I have periodically kept up with the Japanese mobile carrier market. In fact, I’ve written about it on other sites as well. If you’re interested in finding out more about the industry in general, shoot me a message and I’ll write something up here. Hope you enjoyed!

Author: Kenkyo Investing

Kenkyo Investing applies a value investing approach to Japanese equities, providing insights that are often unavailable to non-Japanese speakers.